The current housing market is at an all-time low – house prices are low and so is the number of buyers and new mortgage lending; and views are mixed on whether prices of houses will continue to drop slightly further, remain at the same level for a while, or start to turn and increase rapidly.
Some key points to note regarding the current housing market are:
There is a current increase in re-mortgaging
People are deciding not to move house in the current climate but to expand or modify their existing properties, and many people are obtaining re-mortgages in order to make these changes. Re—mortgaging is actually up to one third of all mortgages now, and levels are at the highest they have been for two years.
Repossessions are also on the increase
Repossessions of properties have also risen to an all-time high, rising by 17% this year alone. This is thought to be due to more mortgages being issued to high income multiples, which is the combination of a couple’s salary, or higher percentages of the property value being loaned, and these mortgages are deemed riskier. Repossessions are also more common in certain areas – Tyneside and a band of towns and villages across the Midlands.
The number of first time buyers has fallen
First time buyers usually account for 3 in 10 approved mortgages, but this has fallen to just 23% during the first few months of this year. This is because first time buyers are finding it more difficult to save the deposits required to secure mortgages.
The total number of property owners is decreasing
It is expected that the total number of property owners will have decreased by over 2 million by the end of the year, as more people sell their houses and less people buy, either for the first time or in a chain.
Rents will increase for tenants
It is estimated that by the end of the year over half of all landlords will have increased the rents on their properties, or will be doing so in the near future. An average property will cost an extra £550 a year, due to an increase in demand for rental properties. This will mean tenants saving to buy a house will find it much harder.